3 who left Alex. Brown name venture for shipIn the late...

BANKING & FINANCE

April 22, 1993|By David Conn | David Conn,Staff Writer

3 who left Alex. Brown name venture for ship

In the late 1700s, when British businessman Alexander Brown left England to make his fortune in Baltimore, the ship he sailed was called the Armata.

So it's appropriate that a trio of former Alex. Brown Inc. executives, who set sail from the mother ship last year, took that name for the brokerage/investment banking firm they've just established. Armata Partners L.P. expects to be up and running within a matter of weeks at its 225 E. Redwood St. location, according to partner Gordon L. Smith, who was a managing director for equity trading at Alex. Brown.

He is joined by the company's former vice chairman, Jack S. Griswold, who also headed the company's realty operations, and by George S. Rich, a managing director in corporate finance. Just last week, Legg Mason investment banker Robert Stewart left to join Armata.

"We all left at differing times for different reasons," Mr. Smith said, "and all came together late last year."

Mr. Smith believes the company will find plenty of business in the competitive brokerage world, although it hasn't targeted any particular niche.

Aside from clearing its trades through Alex. Brown, Armata will have no formal connection to the firm, he said. It's received the necessary approvals from the SEC, but still awaits final word from the National Association of Securities Dealers.

Legg Mason taking expansion route

Once upon a time (a year ago, to be exact), Raymond A. "Chip" Mason declared that "the bigger you grow, the more your ability to manage shrinks."

Lately, it seems he has renewed faith in the ability to manage Legg Mason Inc. Two weeks ago, the company registered with the SEC to sell $50 million in convertible debt as part of its plan to increase capital and expand its brokerage operations. Lately, industry members say Legg has been hiring brokers at a rapid pace.

And this week the company completed the acquisition of Fairfield Group Inc., a Pennsylvania investment firm with almost $2 billion under management. Fairfield's clients include more than 80 banks in the East and Midwest. The company will operate as an independent subsidiary of Legg Mason.

The recent growth spurt hasn't escaped the notice of analysts, including Perrin Long, of First of Michigan Corp. in Detroit.

"It's in keeping with what Chip has been saying, that they're looking to acquire assets," Mr. Long observed. The company's broker force remained flat for about five years until last year, he RTC noted. "They realize now that they must grow their sales force by 6 to 8 percent net each year."

Because Legg Mason is in the "quiet period" before the debt offering, the company said it couldn't comment.

USF&G is all smiles on earnings forecast

There's nothing worse than surprising the analysts, even with unexpectedly good news.

That, apparently, is the rationale at USF&G Corp., where top officials have been boosting expectations for the company's first-quarter earnings for several weeks now.

First, Chief Financial Officer Edwin Pickett told a group of Baltimore security analysts that the consensus prediction of 5 cents a share in the first quarter was "a little conservative."

This week, Chairman and Chief Executive Norman Blake followed up with more precise numbers. In advance of a meeting with insurance industry analysts, he announced that consolidated net income before various accounting changes and prior to certain tax and securities gains and losses "is expected to approximate $22 million, or 12 cents per common share, after deduction of preferred stock dividends."

After Mr. Pickett's remarks, the company's stock rose from $16 a share to $19.25. But amid the market's broad sell-off in the last few days, it has dropped back to close at $18.125 yesterday.

Boyle heads north to Dillon, Read

People, places and things:

* John Boyle, who joined Ferris, Baker Watts' investment banking group from Alex. Brown after a career on Wall Street, is headed back north. He's taking a job at Dillon, Read, partly to be with his wife, who lives in New York. A Ferris official said Mr. Boyle's replacement will be hired soon.

* Taneytown Bank & Trust Co., in Carroll County, has formed a holding company called Monocacy Bancshares Inc. The reasons, according to President and CEO Carroll D. Myers: to provide a more liquid market for the bank's stock and improve the ability to raise capital, and "to maintain community identity and local ownership by protecting against potential unfriendly takeover attempts. . . ."

As part of the plan, Mr. Myers said the company will increase the percentage of stock needed for a vote to approve a change of control. Monocacy has $151 million in assets.

* Baltimore's own SOUNDPRINT, the weekly radio documentary produced at WJHU-FM, has won the Excellence in Personal Finance Reporting award (radio category) from American University and the Investment Company Institute. Producer Gary Covino's winning entry was "Your Loan is Denied," an investigation into mortgage redlining by banks and other financial institutions.

(This column's entry must have been lost in the mail.)

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